Axis Bank Fixed Deposit Rates-2024
Introduction:
Axis Bank Limited is a prominent Indian banking and financial services company based in Mumbai, Maharashtra, and is the third-largest private sector bank in India.
It offers a comprehensive array of financial services including retail banking services like deposits and loans, corporate banking services such as Demat accounts, equity capital markets, mutual fund investments, and international banking services.
Axis Bank offers a variety of fixed deposit schemes that allow customers to secure a portion of their savings for a set period.
The competitive interest rates on Axis Bank Fixed Deposits enable depositors to earn higher returns, providing a safe haven for their money and ensuring judicious use in the future.
At the time of account opening, customers must deposit a minimum amount. Withdrawals from the fixed deposit are restricted until the maturity date.
Key Features and Advantages of Axis Bank Fixed Deposits
Senior citizens receive a higher interest rate than regular customers.
Axis Bank provides a nomination facility for fixed deposits.
The minimum amount required to open a fixed deposit with Axis Bank is Rs. 5,000.
Competitive interest rates are offered on short-term deposits.
Opening a fixed deposit account with Axis Bank is straightforward and hassle-free.
Loans up to 90% of the value of your fixed deposit can be obtained.
A broad selection of fixed deposit schemes is available at Axis Bank.
Axis Bank FD Interest Rates 2024
Tenure
Interest
Rates (PA)
Interest Rate
for Seniors (PA)
1 month - 1 month 15 days
3.5%
4%
1 month 16 days - 1 month 30 days
4.25%
4%
2 months - 2 months 29 days
4.5%
5%
3 months - 5 months 26 days
4.75%
5.25%
5.75%
6.25%
8 months 30 days - 11 months 30 days
6%
6.5%
1 year 3 months - 1 year 4 months 29 days
6.7%
7.2%
1 year 3 months - 1 year 4 months 29 days
7.1%
7.6%
1 year 4 months 30 days - 1 year 5 months 29 days
7.2%
7.85%
Types of Axis Bank FD Schemes
In India, banks offer two primary types of fixed deposits: cumulative and non-cumulative. Cumulative fixed deposits accumulate interest over the tenure and pay it along with the principal at maturity. Non-cumulative fixed deposits distribute interest periodically during the tenure, typically quarterly; monthly payouts are possible but at slightly lower rates. Interest is compounded quarterly in cumulative deposits.
Here are various fixed deposit schemes available:
Standard Fixed Deposits:
Money is deposited for a fixed period.
Interest rates are predefined by the bank.
Terms range from 7 days to 10 years.
Typically offer higher interest rates than savings accounts.
Tax Saving Fixed Deposits:
Designed to offer tax benefits, available at most banks.
Eligible for tax exemptions up to Rs. 1.5 lakh annually.
Feature a 5-year lock-in period without withdrawals.
Accept only lump sum deposits.
Special Term Deposits:
Similar to standard FDs but offer higher interest rates for not withdrawing within a certain period.
Fixed Deposits for Regular Income:
Suitable for those needing regular income from their deposits, with options for monthly or quarterly interest payouts.
Fixed Deposit Scheme for Senior Citizens:
For individuals aged 60 and above.
Offers additional interest of about 0.50% above standard rates.
Flexible tenure options.
Flexible Fixed Deposits (Flexi FDs):
Linked with a savings account.
Allows automatic transfer of excess funds from the savings account to the FD.
Corporate and Alternative Fixed Deposits:
Invested with companies or NBFCs for a specified period and rate.
Potentially higher returns but carry more risk and are unsecured.
Fixed Deposits for Non-Resident Indians (NRIs):
NRE Fixed Deposits: For earnings in foreign currency, offering tax-free interest and full repatriability.
NRO Fixed Deposits: For managing income earned in India, subject to tax but with full repatriability within limits.
Long-term & Short-term Fixed Deposits:
Long-term FDs offer durations from over five to ten years with higher returns.
Short-term FDs have durations from seven days to two years, ideal for short-term savings.
How to Open a Fixed Deposit Account with Axis Bank
You can open an Axis Bank FD account through various methods such as online via Internet Banking or offline at a bank branch.
1) Opening an FD Account Through Axis Bank Internet Banking:
Follow these steps to open an FD account online:
Log in to your Internet Banking account and navigate to the 'Deposit' option.
Select 'Create Fixed Deposit'.
Provide all necessary information and nominate a beneficiary.
Once confirmed, the fixed deposit amount will be transferred from your savings account to the fixed deposit account. You will immediately receive a web receipt.
Once the FD is successfully created, the Fixed Deposit advice will be emailed to your registered email address or sent physically to your postal address. Additionally, the FD advice can be downloaded via internet banking one working day after the deposit is booked.
2) Opening an Axis Bank FD Offline: To open an FD account offline:
Visit your nearest Axis Bank branch.
Complete the FD application form and provide all necessary documents.
Deposit the funds required to open the fixed deposit.
Upon successful processing of your application, you will receive an FD receipt from Axis Bank.
Qualifications for Opening a Fixed Deposit Account at Axis Bank
The following individuals and entities are eligible to open a fixed deposit account with Axis Bank:
Resident individuals, including minors.
Senior and super senior citizens.
Hindu Undivided Families (HUF).
Sole traders, partnership firms, and joint-stock companies.
Trusts
Necessary Documents to Open a Fixed Deposit Account at Axis Bank
To open a fixed deposit account at Axis Bank, you will need to provide the following documents:
Identification proof via KYC documents, which may include an Aadhaar card, driver’s license, or voter ID card.
PAN card, as required by the Income Tax Department of India.
Address proof, which can be verified through KYC documents, a passport, or utility bills such as electricity or water bills.
Early Withdrawal of Axis Bank Fixed Deposit
You can withdraw funds from your Axis Bank fixed deposit before its maturity; however, a 1.0% penalty will be applied. If you choose to make a partial withdrawal, the bank allows one penalty-free withdrawal of up to 25% of the principal amount for the first instance.
Role of Fixed Deposits in an Investment Portfolio
Investing in market-linked instruments carries risks, particularly when aiming for higher returns.
To achieve a balanced financial portfolio, it's crucial for investors to include safer investment options as well.
Fixed deposits offer a secure investment avenue with guaranteed returns, contrasting with higher-risk options.
Thus, even if investors incur losses from other ventures, they can offset some of those losses through the stable earnings from fixed deposits.
This strategy can help maintain financial stability in their overall investment portfolio.
Benefits of Investing in a Fixed Deposit Account
IFixed deposit accounts offer several advantages that make them appealing to investors:
Stable Returns: These accounts provide a constant interest rate, ensuring predictable and steady returns.
Low Risk: As FDs are not impacted by market volatility, they are considered low-risk, making them suitable for conservative investors.
Capital Preservation: The principal amount is secure, and investors are assured of receiving their initial investment plus the accrued interest at the end of the maturity period.
Flexible Tenure Options: Investors can select from various tenure lengths offered by banks, ranging from a few months to several years, to align with their financial objectives.
Ease of Investment: Setting up a fixed deposit account is easy, requiring only minimal paperwork and a straightforward application process.
Regular Income Stream: Particularly beneficial for retirees, FDs can provide a consistent income stream through periodic interest payouts (monthly, quarterly, or annually).
Loan Facilities: Fixed deposits can also serve as collateral for loans, offering financial flexibility while keeping the deposit intact.
Tax Benefits: Certain types of fixed deposits qualify for tax deductions under specific sections of the Income Tax Act, promoting long-term savings.
No Market Dependency: The performance of FDs is independent of market conditions, offering stability regardless of economic fluctuations.
Ideal for Short to Medium-Term Goals: FDs are well-suited for meeting short to medium-term financial objectives, such as purchasing a vehicle, funding education, or planning a holiday.
Drawbacks of Fixed Deposit Accounts
Fixed deposit accounts come with certain limitations, which are outlined below:
Taxation on Interest: The interest income from fixed deposits is taxable under "Income From Other Sources" when you file your Income Tax Returns (ITR). For those seeking tax-free earnings, options like Tax-Saver FDs, ULIPs, PPF, and government bonds may be more suitable.
TDS Applicability: TDS (Tax Deducted at Source) is deducted from the interest earned on fixed deposits, which can reduce the overall returns from your investment.
Comparatively Lower Interest Rates: Generally, fixed deposits offer lower interest rates, typically between 5% to 9% per annum, which may be less than other investment avenues, potentially limiting your investment growth.
Interest Rates and Inflation: Sometimes, the interest rates on fixed deposits may not keep up with inflation, leading to a decrease in the real value of your returns over time.
Fixed Interest Rates: Unlike other investments where rates might fluctuate, fixed deposits maintain a constant rate throughout their tenure. This means returns do not increase even if market or economic conditions improve.
Limited Access to Funds: Your funds are locked in for the duration of the deposit, restricting access to your money. Early withdrawal is possible but usually incurs penalties, affecting your total returns.
Understanding Loan Against Fixed Deposit
Investors with fixed deposits can secure a loan against their FD holdings. The maximum loan amount available can differ from one bank to another and is typically a specified percentage of the fixed deposit value.
The interest rates for loans against fixed deposits are generally lower than those for unsecured loans. Investors looking to take advantage of this should carefully compare interest rates.
The repayment period for such a loan is usually capped at the maturity term of the associated fixed deposit.
Tax Implications on Fixed Deposit Earnings
Interest earned from fixed deposits is subject to Tax Deducted at Source (TDS) according to the rules set forth in the Income Tax Act. This interest income is then reported on Income Tax Returns under "Income from Other Sources."
The Income Tax Department applies the TDS against the individual's total tax liability. However, TDS on interest income is only deducted when the total interest earnings across all sources exceed Rs. 40,000 annually.
If earnings are below this threshold, individuals should submit Form 15G/H to the financial institution to avoid TDS. Form 15G/H can also be submitted for interest earnings above Rs. 40,000, but in such cases, individuals must ensure they meet any remaining tax obligations themselves.
Additionally, if an individual invests in a tax-saving FD, they are eligible to claim a tax exemption on the principal amount up to Rs. 1.5 lakh per financial year.
What is a fixed deposit?
A fixed deposit is a type of savings account where money is deposited for a fixed period and earns interest at a predetermined rate.
How safe are fixed deposits?
Fixed deposits are considered very safe as they are not affected by market fluctuations and often guaranteed by the bank or financial institution.
Can I withdraw money from my fixed deposit before maturity?
Yes, but early withdrawal may incur penalties and result in lower interest earnings.
Do fixed deposits offer tax benefits?
Tax-saver fixed deposits qualify for tax deductions under Section 80C of the Income Tax Act but come with a lock-in period.
What documents are required to open a fixed deposit account?
Typically, you need identity proof, address proof, and sometimes a PAN card, along with the completed application form.
Author
Harish Malhi
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